The author is an editorial writer at the JoongAng Ilbo.
There is a moment in the history of Korea's real estate regulation that remains difficult to forget. It occurred on July 30, 2020, when the Democratic Party pushed through two major lease laws during a plenary session of the National Assembly.

Despite strong opposition from the conservative bloc, Democratic Party lawmakers forced the bills through with what critics described as the speed of a military operation. Immediately after the vote, Kim Tae-nyeon, then floor leader of the Democratic Party, raised his fist in celebration. The following day, at a meeting of the party's Supreme Council, he said the government's policy determination was firm and warned that stronger additional measures could be introduced at any time.
What followed in Seoul's jeonse market was a severe disruption.

Jeonse is Korea's distinctive rental system in which tenants provide landlords with a large lump-sum deposit instead of paying monthly rent, with the deposit returned at the end of the contract. According to KB Real Estate, apartment jeonse prices in Seoul rose more than 10 percent in the second half of 2020. It was the highest increase in 34 years since related statistics began in 1986.
For tenants searching for housing, the situation felt even worse than the numbers suggested. In some apartment complexes, jeonse listings almost disappeared, making it difficult even to find a property to view.
The political backlash soon followed. About eight months after the lease laws were passed, Kim Tae-nyeon held a press conference on April 1, 2021, and bowed his head in apology. "The Democratic Party fell short," he said, pledging that the party would also root out hypocrisy within its ranks.
The apology came ahead of the Seoul and Busan mayoral by-elections, as the ruling party attempted to calm public anger over housing policy. In the end, however, angry voters delivered their own verdict at the ballot box, widely interpreted as punishment for the government's failed real estate policies.
Now the question arises: could the nightmare of six years ago return?
Signs of renewed strain are appearing in Seoul's housing market. According to a recent report from KB Real Estate, Seoul's jeonse supply-demand index reached 166.8 last month. It was the highest level since September 2021, when the shortage triggered by the lease laws was still unfolding.
A reading above 100 means that demand exceeds supply. The figure had dropped as low as 45 in January 2023, illustrating how dramatically the market has tightened again within just a few years.
This year Seoul also faces what industry observers call a severe "move-in drought," referring to a sharp decline in newly completed apartment units available for occupancy. At the same time, monthly rents have surged. According to the Korea Real Estate Board, the average monthly rent for apartments in Seoul exceeded 1.5 million won ($1,120) for the first time in January.
Yet government policy appears to be moving in a direction that may reduce rental supply rather than increase it.
One example is the expansion of the land transaction permit system. Under this regulation, apartments purchased in designated areas cannot legally be rented out for at least two years. Buyers must live in the property themselves for that period. If they fail to do so, they may face financial penalties and even criminal punishment.
Officials seem to believe that if jeonse supply falls because buyers move in themselves, demand will decline as well.
Consider a hypothetical case. If a renter living in Complex A buys a home in Complex B and moves there, the supply of jeonse housing in Complex B will fall. But demand in Complex A would also decrease, theoretically balancing the market.
This argument was echoed on Feb. 23 during a meeting of the National Assembly's Finance, Economy, Planning and Budget Committee. Lee Hyeong-il, first vice minister of economy and finance, said the situation should ...